5 Tips for First-Time Home Buyers
"When I was your age..."
"We know, Dad. When you were our age you were married, owned a home, two cars, and had your second child on the way. But times and the economy have changed, and we just can't accomplish everything you did by 30 anymore." Sound familiar?
What if we told you that you can? What if we told you that you could own a home, and pay less for a monthly mortgage than your current rent? These are all very real things, and you can totally do it!
The national average for a home loan sits right around $200k with about $1,000 average monthly payment for a 30-year mortgage at 4% interest. If you're living in or around the Greater Portland Area, rent for a 1-bedroom apartment can exceed $1400 per month. More bedrooms, more money. *GASP* That's big $$$ right down the drain that you could be investing in your own home.
So stop throwing away your money renting, grab a piece of paper, and we're going to give you the Top 5 Tips for First-Time Home Buyers below!
#1) Pick a Neighborhood
Go ahead, Google away. What is most important to you? School system? Easy work commute? Brunch? Take the time to research your options, and consider everything that is important to you. Just make sure that all of this research isn't done on the internet; its super important to physically visit these neighborhoods to truly determine if they're the right fit for you.
In a perfect world, at the end of the exercises above, you should have your desired neighborhoods narrowed down to your top 3 favorites. Once you've narrowed your options down, visit again. And again. Take a ride by during the morning, middle of the day, and evenings. Pay attention to the local community, and what types of events may be happening.
All of these practices will result in a well-rounded understanding of the areas you're interested in living in, which will narrow your search results and help drastically when house hunting.
#2) Get Pre-Approved
This is important for a number of reasons;
- If you are out looking at homes without a pre-approval, you will not be ready to buy when you find "the one" and someone else can jump on the opportunity while you go through the process. Getting a true pre-approval takes more time than a few clicks online. We want you to get a good pre-approval from a reputable lender so that when you find the home you have always wanted, we can move right forward with an offer.
- We can not submit an offer on a home for you without either a pre-approval for a mortgage or a proof of funds for a cash purchase because there is no reason that a seller would accept an offer without proof that you have the money to purchase the home.
- Imagine you are the seller, because you will be one day! Do you want agents privately showing your home to people who are not even qualified to purchase it? Trust us, the answer is "no."
#3) Choose a Buyer's Agent
We can't stress enough the importance of working with a Buyer Agent throughout the home buying process, especially during your first time. Real Estate Agents do all of the following for you (plus more!): Provide neighborhood knowledge, negotiate, connect buyer's to a professional network of opportunities otherwise unavailable, handle VOLUMES of paperwork (precisely), provide damage control if any surprises arise, and you can trust that they'll answer all of your questions accurately coming from a proper education background and experience in the field.
And did you know that 99.9% of the time, Agent fees are covered by the listing party? AKA at NO cost to you!!
But really, do the work before you start looking and find an agent who you think will do a great job for you. Such as the top 10 producing agents in The Maine Real Estate Network in 2016, who consist of individuals who have lived locally their entire lives and can provide accurate insight into each neighborhood and in many instances, specific home history.
#4) STOP LOOKING AT FIXER UPPERS
Thank you, HGTV, for sensationalizing all of the hard work and money that goes into buying a fixer-upper. And making it look like you can grab some old barn wood, a beautiful wife, and increase the home value by $150,000 overnight.
Reality check! They may be cheaper at first, but once you consider all of the time and work that goes into making these livable, you'll realize the best way to go is the opposite direction. As far as you possibly can.
And if you really want to have a custom home, there are new construction packages that are offered locally for as low as $230,000! Brand spanking new. No mold. No re-painting. These new construction packages come with thousands upon thousands of customization options too, and the pros take care of all of it before you move in. Jackpot!
#5) Understand the Process
Don't start learning the steps of the home-buying process after you find your dream home and make an offer. Get informed early and ask your agent to go over how the process will be with you. They will familiarize you with each step, and always keep you informed on things you may not have considered otherwise. Like, for example, why is it important to have the home inspection completed before you move in, who can do it (hint - it shouldn't be your Uncle who knows a lot about houses), and why does this to be completed within 10 days of the effective date.
What? What even is an effective date?
We could write an entire blog post about the process, but we'll save that for another day.
Looking to be pro-active? Follow us on Facebook and keep your eyes peeled for our monthly Home Buyer Events, held all over the Greater Portland Area. We usually pick a neat restaurant, brewery or somewhere fun, have some snacks, go over the process, then leave time at the end for open discussion and question answering. FOR FREE!